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Category Archives: Financial market

EVENT TRADING

Saturday, December 5, 2009

The largest price moves and the greatest volatility are the result of reactions to unexpected news. These market events pose the greatest risks to all traders because they are unpredictable and of such great magnitude that they are out of proportion with normal trading risk. It may be possible to trade for a number of [...]

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Market Selectivity

Tuesday, December 1, 2009

The market seems to focus on one news item at a time. Although the same factors are always there to affect prices, they must reach a point of newsworthiness before they become the primary driving force. For heating oil, the combination of unexpected, sustained cold weather compared with available inventories will activate a weather market. [...]

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Ranking and Measuring

Monday, November 16, 2009

The problem of ranking and assigning values to news items requires a knowledge of how others see the news. Klein and Prestbo studied this problem for the stock market and concluded that about 90% of the Wall Street Journal readers perceived news in the same way (bullish, bearish, or neutral). The same relationship can be [...]

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